The tax return period is back, and 1^st of May deadline is prominently highlighted in the news. But is all the attention on this dreaded date actually justified? And what about the other date we hear about, the 1^st of April?

Do You Need to File a Tax Return for 2024?

If you are required to file a tax return for 2024, you’ve likely already received a letter from the Dutch Tax Authorities (Belastingdienst) inviting you to file your return. The letter specifies the final submission date for your tax return, which depends on the type of tax form you need to complete. Additionally, you may have heard that you can avoid paying interest on your tax assessment by filing your return before the 1^st of April. This interest is often referred to as a penalty or tax increase, raising alarms for many taxpayers.

Filing a Tax Return After the Deadline Is Possible

For all our clients, we request an extension until the 1^st of May 2026. The tax authorities grant extensions to spread the workload throughout the year. As long as your return is submitted by this extended deadline, you will not be fined. We request extensions due to the high volume of returns and processing times, ensuring each tax return gets the attention it deserves.

The shift from the the 1st of April deadline to the 1st of May coincides with the VAT return filing period, creating a challenging workload peak for us as tax filing office, especially since the VAT return deadline is strict and non-negotiable.

No Need to Panic

If you are not yet a client of ours and your tax return has not been submitted by the 1^st of May, you will receive a reminder from the Tax Office. Even after receiving this reminder, there’s no need to worry. No fine will be issued immediately. If you still haven’t filed after the reminder, you’ll receive a formal warning (aanmaning), providing you with additional time to submit. Only after this will a fine be imposed. If you have received a reminder, we can still request an extension for you—but not after receiving a formal warning.

What is important?

The key is to avoid tax interest (belastingrente). This interest is charged if the tax assessment is issued after the 1^st of July and is set at 6,5% for income tax. It begins accruing from the 1^st of July. To prevent this, file your tax return before the 1^st of May.

To avoid rushing your tax return, it’s often wise to estimate your situation and request a provisional tax assessment, which can later be adjusted with the final tax assessment. This is particularly relevant if you expect to owe a substantial amount. For refunds, this interest does not apply (unfortunately, no interest is paid on refunds), and for small payable amounts, the financial impact is negligible.

Tax Return Deadline for M Forms: July 1

The 1^st of May deadline only applies to the standard P form. If you were a resident of the Netherlands for all of 2024, you will need to file a P form. However, if you emigrated from or returned to the Netherlands during 2024, you’ll need to complete an M form, which has a deadline of the 1^st of July.

In some cases, no tax form is issued at all. It is your responsibility to determine whether you owe taxes and request a form if needed. In years of immigration or emigration, refunds are not uncommon, making it worth your time to check this carefully. The M form is a critical filing that changes your tax obligations, so seeking professional advice is highly recommended.

Other Reasons to File Promptly

There are situations where it’s beneficial to file your return promptly, such as when you expect a significant tax payment or refund, or if you need to apply for a mortgage. In these cases, it’s wise to contact us early. We can prioritise your return or request a provisional tax assessment to avoid interest charges.

Conclusion

You will not incur a fine or penalty for filing your return after the deadline, provided extension has been granted. If extension is requested it is important to make a reasonable estimate of your due tax and if necessary, request a provisional assessment. Extension is always possible and easy to arrange unless a formal warning has been issued. A reminder will always precede a warning, so there’s no reason to panic as long as you respond to communications from the tax authorities.

With our expertise, you can rest assured that your tax return will be filed accurately and on time. If you’re not yet a client and want to ensure your (international) tax situation is optimised, we’re here to help.

Here are some other tax tips and changes for you this year.

General

• Do you expect to pay tax for the 2024 or 2025 tax year? Requesting a provisional assessment in good time, will save you legal interest. Interest is calculated if the assessment is imposed later than 6 months after the end of the calendar year (1 July 2025). The interest is 7.5% currently. To ensure that the assessment is imposed in time, we recommend that you apply for it before 1 April 2025. The assessment for the 2024 tax year must be paid at once. There is the possibility of paying the assessment for the tax year 2025 in instalments during the year. Do you have questions about this? We are happy to assist you in applying for a provisional assessment.
• If you expect to receive a refund for 2019, an Income Tax return for this year must be submitted before December 31, 2024. In 2024, the 5-year term for submitting this declaration will expire.

Deductions

• If possible, bundle deductible expenses such as medical expenses and donations in one specific year. For example, a deduction is achieved earlier and the threshold is only deducted once from the expenses. For donations, the threshold disappears completely if you commit to donating to a charitable institution for 5 years, which has to be agreed on in writing.
• In 2024, deductible items may be taken at a maximum of the low rate of 36,97% even if your income falls in the highest bracket.

Box 3

• As mentioned in the introduction, if you were planning on converting (low-yielding) assets (e.g. shares, crypto, real estate) to bank accounts, this could save a substantial amount of box 3 tax for 2025 if this is done before the end of the year. All other assets apart from bank accounts are taxed at the highest rate, while bank accounts are taxed at a lower rate.
• Receivables and loaned amounts are also taxed at the highest rate, therefore it would save box 3 tax for 2025 if the amounts are received or paid back into your bank account before the end of the year. This is only applicable if, in due course, you choose for taxation on fictitious box 3 income.The green investment exemption in box 3 will be scaled back from 1 January 2025. From 1 January 2025, the green investments exemption will be reduced to € 30.000, for 2024 the exemption was € 71.251.

Home owners

• If you received a one-off gift under the exemption of up to € 100.000 for a house in 2022 and you have not yet fully used this amount, you should spend it on your house in 2024; if not, gift tax will be due on the unused portion.
• House buyers between the age of 18 and 35 can benefit from a one-off transfer tax/stamp duty exemption if they meet certain requirements. The limit of this starter exemption (house value limit) will be raised from € 510.000 to € 525.000 in 2025, meaning that by waiting with the house purchase until 2025, you could potentially save thousands of euros in transfer tax.
• The general transfer tax/stamp duty rate will remain at 10.4% in 2025 as in 2024. However, with effect from 1 January 2026, this rate will be reduced to 8%. This rate is valid for all properties except those to which the reduced rate of 2% or the starter exemption applies.

Lately we have received a lot of queries about a so-called emigration tax or Exit Tax. A motion was passed by parliament in October, asking the government to explore options for restricting tax evasion when leaving the Netherlands e.g. through a fictitious domestic tax liability after emigration. The parliament has requested a response before the end of the year. As this is only a motion, it is by no means certain whether this will have any further legal effect. No conclusions can yet be drawn from this and the government’s response to the motion should be awaited.

In late 2023, two amendments to the 2024 tax plan were adopted that further restricted the 30%-ruling. This involved the reduction of the tax-free percentage to 20% after 20 months and to 10% after another 20 months, as well as the abolition of the partial non-domestic tax status. These restrictions have since been amended via the 2025 tax plan. With effect from 2027, the maximum tax-free allowance will be 27% instead of 30%, and this rate will remain in place throughout the duration of the 30%-ruling period.

The option for the partial non-domestic tax status however will no longer be possible from January 1st, 2025. For employees who already were eligible for the 30%-ruling at the end of 2023, there is a transitional arrangement through which they can still opt for partial non-domestic taxation until the end of 2026.

As was the case in 2024, the 30% ruling is capped to a certain income level called the WNT norm (also known as the Balkenende norm). In 2024 this amount is € 233.000 on an annual basis. For 2025 this will be increased to € 246.000. This means that the 30% will not be applied to the part of the income that exceeds this amount. There is a transitional arrangement for employees for whom the 30%-ruling was applied over the last pay period (December) of 2022. For these employees, the 30%-ruling will only be capped from January 1st, 2026.

As described here, in the summer of 2025 a form can be filled in by taxpayers whose actual return was lower than the fictitious return in a given year. However, this must be specified and supported with documentation.

The actual return consists of the actual income on your box 3 assets. For instance, interest received on a bank account or loan, dividend income, capital gains and losses on e.g. shares or real estate, rental income, etc. The Supreme Court ruled that expenses will not be deductible, with the exception of interest on debts in box 3. Furthermore, both realised and unrealised gain should be included in the levy, e.g. a decrease in the value of shares or an increase in the value of real estate. To determine the value of property, the WOZ value is used.

In most cases a reduction will not be possible if there is a substantial increase in the WOZ value of a second home or holiday home. This underlines the importance of objecting against the WOZ value if it is on the high side.

Here is an overview of the box 3 tax under the new system for 2024 and 2025:

Box 3 tax	2024	2025
Asset category	Fictitious income	Fictitious income
Bank accounts	1,03%*	1%*
Debts	2,47%*	2,5%*
Other assets	6,04%	6%

*Exact percentage will be announced at the beginning of the following year.

For box 3, there are no major changes in 2025 compared to 2024. Under this system, the savings, other assets and debt categories each have their own percentage of fictitious return based on the value per beginning of the year. In 2025, the tax-free wealth increases to € 57.684 (€ 115.368 for fiscal partners). Based on the asset mix, an average return is calculated on the total assets. The flat rate on the fictitious return in box 3 was 36% in 2024. This will remain the same in 2025.

Legal proceedings have been going on for years about the fictitious way of levying tax on the box 3 capital. After all, a fictitious return was assumed that was many times higher than that received on the savings account. Ultimately, the Supreme Court ruled in December 2021 that the fictitious calculation of box 3 for the years 2017 and 2018 can be disproportionately burdensome and therefore in violation of the human rights treaty. According to the Supreme Court, legal redress must be offered to taxpayers who have objected.

On June 6th last, the Supreme Court ruled that the legal redress as offered by the Tax Office can still be disproportionately burdensome. This brings a levy based on actual income on assets a step closer. In the summer of 2025, taxpayers will be able to submit their actual box 3 return to the Tax Office through a form. In the meantime, it is important to appeal against final assessments if your actual return is lower than the fictitious return.

In 2025 a new bracket will be added to the Income Tax in box 1 for individuals who have not yet reached the state pension (AOW) age. The below chart gives an overview of Box 1 income tax in 2024 and 2025:

Income Tax – AOW not reached	2024	Income Tax – AOW not reached	2025
First bracket up to € 75.518	36,97%	First bracket up to € 38.441	35,82%
Second bracket from € 75.518	49,50%	Second bracket from € 38.441 – € 76.816	37,48%
		Third bracket from € 76.816	49,50%

For taxpayers who have reached the state pension age the following rates and brackets apply for 2024 and 2025:

Income Tax – AOW reached	2024	Income Tax – AOW reached	2025
First bracket up to € 38.098	19,07%	First bracket up to € 38.441	17,92%
Second bracket: € 38.098- € 75.518	36,97%	Second bracket: € 38.441 – € 76.816	36,97%
Third bracket from € 75.518	49,50%	Third bracket from € 75.624	49,50%

*other brackets apply to people born before 1 January 1946. For box 2 rates, please
refer to the business section of the newsletter.

It isn’t hard to find reasons to move and start a business in the Netherlands or to move to the Netherlands with your business.The Dutch are known for having a good business climate. Not only is there good infrastructure, good healthcare and education, but the Dutch government actively promotes foreign direct investments. Here are a few things you will have to consider or do, when setting up a business in The Netherlands!

Structure

When bringing your business to The Netherlands or starting a business in the Netherlands, you will have to choose the right business structure for your business. We can help to determine which structure suits your company best. It can have a very big impact on your tax liability.

Registration

It sounds pretty straightforward, but yes, the first step if you want to set up your business in the Netherlands is to register with the Chamber of Commerce (KvK) and also with the Dutch Tax Office (Belastingdienst). We are happy to do this on your behalf. The communication with the Dutch Tax Office especially as a foreigner, can be time-consuming and complicated when having just moved country for example.

Eligible

It is wise to check if you are eligible for the Dutch tax benefits and deductions. Here is an overview of the available deductions:

• Self-employed deduction: This is a fixed deduction for self-employed entrepreneurs who meet certain conditions resulting in lower income tax.
• Starting deduction: This is a deduction for starting entrepreneurs, who qualify for the self-employed deduction. This applies for the first three years of business.
• SME Profit Exemption:  A percentage of the profit from small and medium-sized enterprises (SMEs) is exempt from tax. This reduces taxable profit and thus the amount of payable tax.
• Small Businesses Scheme (KOR): If your annual turnover is less than €20,000, you may qualify for the KOR. This means you do not have to pay VAT, but you also cannot reclaim VAT.
• Investment Deduction (Investeringsaftrek): This includes the small-scale investment deduction (KIA), energy investment deduction (EIA), and environmental investment deduction (MIA). These deductions are designed to encourage investments in business assets, energy-efficient, and environmentally friendly technologies.
• 30%-ruling: click here to view the most recent update, as the ruling has undergone a lot of changes recently. This favourable ruling allows the employer to reimburse 27% of the employee’s gross salary tax-free.

There are various requirements for these tax benefits and rulings. We can help you check if this applies in your situation and if you are eligible.

Complete service

Not only can we help you with registering your business and helping you choose the right structure for your business in the Netherlands, but also afterwards it is important to keep up to date with the latest changes in the Dutch tax laws. Finally, there are quarterly and yearly tax returns that will have to be filed. We would be happy to look after these as well. We offer a complete service, from setting up your business, to filing the needed returns and making sure your business is gaining maximum tax benefit, yet is tax-compliant as well. Contact us now!